![Chairman of the Australian Meat Processor Corporation Peter Noble. Chairman of the Australian Meat Processor Corporation Peter Noble.](/images/transform/v1/crop/frm/38U3JBx5nNussShT8aZyYjc/a3b7b84a-0928-41ad-b7ed-cc4b824b6684.JPG/r0_163_5232_3221_w1200_h678_fmax.jpg)
FAST-GROWING international competition, burdensome regulation and the much-documented consumer shift to chicken and pork head up the list of challenges Australia’s red meat industry is facing.
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That’s the finding of a report the processing sector has put together based on extensive commissioned research and a comprehensive stakeholder survey.
Against a backdrop of senate and competition watchdog examinations of the beef industry, and at a time when plants are in negative profit margin territory and scaling back capacity, processors have opted to come out on the front foot in terms of identifying their strategic risks.
The hope, according to Peter Noble, chairman of the report’s publishers Australian Meat Processor Corporation (AMPC), is that by putting information on the industry’s vulnerabilities on the table, it might serve as a platform for dialogue on complicated issues.
Issues of mistrust between producers and processors have been loudly broadcast via the high-profile inquiries and many industry leaders, from both sides, believe a lack of understanding is fuelling that.
The other hope, Mr Noble said, was that research and development activities could be directed at specific opportunities that arise from the identification of these risks and at mitigating their impact.
The report defines six material risks: international competition, changing consumer meat-eating patterns, a fragmented supply chain, a complex regulatory environment, the concept of a social licence to operate and climate change.
Concerns about the long-term sustainability of the processing sector in Australia were shared across many governments, industries, communities and regions, according to Mr Noble.
This is our largest manufacturing player - it underpins the economies of towns throughout the country.
The red meat industry was worth $23 billion to Australia and processors were in a unique position because they have touchpoints with all participants in the supply chain, Mr Noble said.
“Looking through lens of the processing sector does present a different view to that of the producer,” he said.
“The inquiries happening now deal with a crisis of confidence between processor and producer and all the risks identified in this report touch on that.
“Take our international competitiveness - if we lose the battle in the global space, with 74 per cent of our beef production exported, you can see the consequences that will flow to all participants in the supply chain.”
The report forecasts international competition to increase over the next five years, largely due to cost advantages.
To counter that, AMPC is investing to improve cost structure and develop innovations and technologies such as the prototype six-axis robot which picks individual prime cuts from a conveyor and places them in cartons.
For all the strategic risks pinpointed, the industry has a plan of attack.
On the social licence front, for example, AMPC is researching more sustainable practices such as reducing water, energy usage and the release of effluent at processing facilities and increasing advocacy and research into the industry’s social impact.
The full sustainability report, called “A feast of Ideas”, and information on the ways the processing sector is addressing the risks it has identified, is at http://feastofideas.com/